Investors are pleased as SEBI has approved changes to several important rules related to financial markets. The market regulator SEBI has made amendments to many rules related to the stock market and mutual funds, which will now make investing in mutual funds more cost-effective than before. SEBI's fourth important meeting of the year was held on Wednesday, December 17. During this meeting, the capital market regulator SEBI made several significant and major decisions for stock market and mutual fund investors simultaneously. SEBI's recent board meeting proved important for both investors and companies, as many proposals and rules were approved, which will help resolve long-pending issues.
Investors who still have physical shares, in particular, will receive significant relief. The main purpose of SEBI's changes is to provide convenience to investors by speeding up share-related transactions and reducing unnecessary paperwork. Additionally, rules related to the debt market and credit ratings have also been improved. SEBI has provided an important opportunity, especially for those who still have shares in physical form, to transfer their shares in their own name.
You can make the most of this opportunity until January 6, 2026. However, the only condition is that the shares must have been purchased before April 1, 2019, and the original share certificate must be available. At the same time, SEBI also clarified that this facility is not available for everyone. Shares involved in legal disputes or fraudulent activities are excluded from this facility, allowing transfers only in genuine and clean cases.
Additionally, SEBI has made another important decision for investors by reducing the mutual fund expense ratio, providing significant relief to millions of mutual fund investors. This change was made in response to the demand from Asset Management Companies (AMCs) to make the proposed limit on brokerage expense ratio more practical. The expense ratio will now be known as the 'Base Expense Ratio' (BER), which will not include various liabilities such as GST, stamp duty, SEBI fees, and exchange fees.
Changes in Mutual Funds by SEBI
This fund expense ratio is charged for management, annual fee administration, and other expenses. Previously, the total expense ratio included all legal and brokerage fees. Now, however, brokerage, regulatory, and legal responsibilities will be added separately to TER and BER, increasing transparency. Additionally, changes have been made to ICDR rules, making the IPO process simpler.